A group of European securities depositories announced plans for a joint venture to improve post-trade efficiency in Europe.

Depositories from Austria, Denmark, Germany, Greece, Norway, Span and Switzerland signed an agreement to establish Link Up Markets, a joint venture to improve efficiency and reduce costs of post-trade processing of cross-border securities transactions in Europe. The signatories include: Clearstream Banking AG Frankfurt, Hellenic Exchanges S.A., IBERCLEAR, Oesterreichische Kontrollbank AG, SIS SegaInterSettle AG, VP
Securities Services, and VPS.

The firms say the Link Up Markets initiative is a result of the changing market environment and aims to promote simplified cross-border business. The seven CSDs believe that improved interoperability between them with a single point of access for customers will result in significant cost reductions.

“For many years, customers have been requesting a solution for easy access to other markets. The CSDs participating in the initiative have developed a unique solution geared at reducing the complexity and the costs of cross-border transactions,” said Jeffrey Tessler, chairman of Clearstream Banking, adding that they will establish, “an environment that creates the potential to reduce current cross-border settlement costs by up to 80 %.”

Link Up Markets will establish a common infrastructure allowing for easy implementation of links between CSD markets and introducing efficient cross-border processing capabilities. By connecting to the common infrastructure, each participating CSD has access to the services of the other participating CSD markets across all asset classes (except derivatives).

The new service is scheduled for launch in the first half of 2009.

Link-Up Capital Markets S.L. will be based in Madrid. Each participating CSD will take an equity stake in the company, whose role will be to develop, maintain and operate the technical solution and to explore how to further leverage the joint service portfolio.